Bonus Certificate

Just like discounted certificates, bonus certificates bring certain possibility of security against losses. For this security, the investor gives up the dividend from the underlying asset. Unlike discounted certificates, there is no limit for maximum yield. Bonus certificates make it possible for the investors to make a profit on stagnating and even slightly declining markets. In the event that the underlying asset breaks through the protective barrier, the loss may be significant. These types of certificates exist on the market speculating on both the growth and the decline of the underlying asset. The described type of certificate includes share premium risk. In the event that the protective barrier is broken through in the certificate, the loss from such a product as compared to the underlying asset may be higher by the amount of the premium. Other risks – see Investment Certificates.